CHINA does not get enough credit for what it has achieved and the superpower role it already plays in the world, said Law and Foreign Minister K. Shanmugam.
Speaking at The Straits Times Global Outlook Forum last Friday, he noted that the reality of a China-dominated region is “already here”.
It is either the biggest or second-biggest trading partner and investor for almost all the countries in South-east Asia, he said. Its influence over the less developed countries in the region is even greater: Of Cambodia’s US$14 billion (S$17.6billion) gross domestic product (GDP), for example, Chinese loans amount to some US$8 billion or US$9 billion, he said.
“Commercially, all of us now owe our prosperity to some degree to China,” he pointed out.
Responding to a point by dialogue moderator, ST editor Warren Fernandez, that China’s economic growth from now on is not so assured, Mr Shanmugam said: “It’s all relative, isn’t it?”
“I think most countries in the world will be happy with 7.6 per cent or 7.4 per cent growth,” the minister said, referring to China’s GDP growth of the last two quarters.
He said he found descriptions of China’s “slowdown” to be hyperbolic: “The reality is people don’t give China enough credit. You get a chap who is arrested, he ends up on the first page of the international newspapers, but the fact that 500million people have been moved out of poverty, the fact that the Third Plenum now has come out with what could potentially be very significant restructuring (do not).”
Last year, Beijing removed Chongqing party boss Bo Xilai from his post and this year tried him for taking bribes, embezzlement and abuse of power for covering up his wife’s murder of a British businessman, in a case that captured headlines worldwide.
The Third Plenum was a key meeting among Chinese political leaders last month that set the reform agenda for the next decade. Among the changes are the loosening of China’s one-child policy and ending the use of labour camps.
But the Chinese behemoth also faces challenges of a massive scale, Mr Shanmugam said during the 90-minute dialogue attended by over 400 people.
These include managing the “largest transmigration in the history of the world” that will see 60 per cent of its population living in its cities, as well as narrowing the income gap and the larger wealth gap between the coastal regions and its interior provinces.
China also needs to move away from its export-led growth model, where it makes goods “faster and cheaper” than anywhere else in the world, to one where internal consumption plays a bigger role. This, he noted, would be a “significant boon” to all the countries in the world, including South-east Asia, because it means a huge new market of 1.3billion people for their goods and services.
“Of course, you’re going to have to compete with the Chinese, who are very fierce competitors, but it’s an opportunity,” he added.
Asked about Chinese electricity giant Huaneng’s acquisition of Tuas Power from Temasek Holdings in 2008, Mr Shanmugam said that from the Chinese point of view, such investments go beyond economic calculations. They can also help their strategic interests on the geopolitical scene, he noted, a goal that all big countries, not just China, have.
Whether extending low-cost loans to countries or acquiring their major businesses, “part of it is to help those countries, part of it is also their diplomacy”, he said.
“Every country does it, Japan does it, Australia does it, the US does it, the Chinese would do it and are doing it. The more advocates a country has in the world, the better (off) it is, obviously.”